Much has been said about making money. Losing money? A little less popular of a topic. Not as glitzy I suppose. Glitzy or not, we don’t have to be a sage, seerer, or soothsayer to know the most common way businesses go out of business is losing money, true?
Not having a firm grasp of costs (which results in losing money) has plagued companies throughout the ages. I quoted a former IBM CEO earlier this year:
There
were times when we lost money on every PC we sold, and so we were conflicted -
if sales were down, was that bad news or good news?
Louis
V. Gerstner, Jr.
I spent my entire career selling modern technology to business executives. Each deal was hotly contested by multiple vendors. Each client would share a few common goals – cut costs; improve margins; have reliable data to make better decisions; etc. The client’s evaluation committee could get quite political. My advantage? I knew Todd:
Todd's Political Principles
·
No matter what they're talking about, they're
talking about money.
· Truth varies.
One of my client stands above all the others. Not solely because it was the largest sales transaction I ever closed; but because of the business justification their VP and Controller, Pete Krejci, shared.
At our very first meeting Pete said:
Gary, I’m probably going to spend $2 million with Oracle; I’m willing to spend $50k just to ensure it works.
An interesting introduction, don’t you think?
I sold Pete’s company, UnoVen, Oracle’s Enterprise Resource Planning (ERP) system back in the day. UnoVen was a joint venture between Unocal Oil Company and Venezuela. Unocal had a refinery on the southeast side of Chicago; Venezuela had the oil. UnoVen sold their finished products through a couple hundred gas stations in the Chicagoland area.
UnoVen had the usual goals – cut costs; improve margins; etc. But in Pete’s case, he was having a particularly hard time getting his division managers to realize the importance of reliable data for making good business decisions. He explained his business case this way:
Gary, what keeps me up at night is when I tell my division managers we’re losing a penny a gallon at the pump, they respond; don’t worry. We’ll make it up in volume.
And that is how businesses go out of business.
GAP
When life gets tough we could get a helmet… or…
we
could leverage the peace and share the power of a positive perspective.